Trump Media & Technology Group Corp. has shown “material weakness” in internal controls that create a risk of financial reporting and misstatement, the company’s latest quarterly results showed.
The company conducted disclosure and management assessments and found that the procedure was ineffective, the report said. “The inability to design and maintain formal accounting policies, processes and controls requires the need for additional accountants with the experience required for analyzing, explaining complex transactions and having the necessary experience for SEC reporting rules.”
The findings came after the company posted a net loss of $31.7 million in the first quarter. This ended with cash, cash equivalents and a short-term investment of $759 million.
“TMTG management has determined that it is primarily related to the failure to design and maintain formal accounting policies, processes and controls to analyze, explain and properly disclose revenue records, and the need for additional accountants with the necessary experience in the SEC reporting rules states in the statement.
The findings pose the risk of “a reasonable possibility that material misstatement in the entity’s financial statements will not be prevented or detected in a timely manner,” according to the statement.
The Media Group said it had implemented corrective actions, including hiring additional accounting staff with the background and knowledge needed to fix the issue.
This story was originally featured on Fortune.com.
